Regulated electricity

One utility company in your area generates, delivers, and bills you for electricity, the government sets and approves the rates

Key points:

1. No choice of provider
2. Stable pricing
3. No competition
4. Utility handles the wire and the power supply

Deregulated electricity

One utility owns the poles, wires and delivers the power, but you can choose your electricity supplier which sets the rate

Key points:

1. Competition among suppliers which can offer lower rates
2. May see more flexible options or plans
3. Delivery reliability doesn’t change because the same utility maintains all the lines

*In Texas, most of the markets provide options for you to choose 
the electric provider.

Fixed rate

Price per kilowatt hour stays the same for length of contract

Pros:

1. Predictable monthly rates even if energy market price raises
2. Easier for budgeting and long term stability

Cons:

1. May pay more if the market price drops
2. Early termination fees if you switch before your contract expires

Variable rate

Price per kilowatt hour can change month to month depending on market conditions

Pros:

1. No long term contracts or early termination fees

Cons:

1. Risk of sudden bill increase if market price rises
2. Less predictable monthly costs

Keys to choosing a company

Contract length:

1. Plans may range from month to month or multi-year commitments

Fees and terms:

1. Watch for early termination fees
2. Deposit requirements
3. Hidden charges

Reputation and service:

1. Look at customer reviews and company history

Benefits of locking in an annual rate

Stable bills:

1. Protects you from seasonal price spikes

Budget confidence:

1. Easier to forecast monthly expense

Potential savings:

1. Many suppliers offer discounts or incentives for longer-term contract